Optus Ordered To Pay $1.5m Fine For Misleading Representations About NBN

Thursday 24 May 2018 @ 10.52 a.m. | Crime | Legal Research | Trade & Commerce

In a recently handed down judgment, the Federal Court has ordered Optus Internet Pty Ltd (“Optus”) to pay penalties of $1.5m for making misleading representations to customers about their transition from Optus’ Hybrid Fibre Coaxial (“HFC”) network to the National Broadband Network (“NBN”).

The Australian Competition and Consumer Commission (the “ACCC”) instituted proceedings against Optus in the Federal Court in 2017.  The ACCC acknowledged that Optus has been co-operating with its investigation, including agreeing to a Statement of Agreed Facts and Joint Penalty Submissions leading to the current decision.


From October 2015 to March 2017, Optus informed around 14,000 of its customers that their services would be disconnected (some in as little as 30 days) if they did not move to the NBN. Under the terms of its contract, Optus could not force disconnection within the time-frame it claimed.

For more information, see TimeBase’s previous article regarding this case.

The Alleged Conduct

The ACCC alleged that Optus also made misleading representations to customers that they had to sign up to Optus’ NBN services, when they could have chosen any internet service provider. Optus benefited by around $750,000 as a result of the conduct.

According to the SMH, Optus also misled customers by saying they could only sign up with Optus NBN, when in fact they had the option to consider competing networks such as Telstra, TPG or iiNet. Optus also had a financial incentive as it received migration payments from NBN Co for each customer it moved to an NBN-based service.

The article also reports that receiving these payments was important for Optus, which even went as far as calling them a "bounty" as they formed part of their annual financial targets.

Comment from the ACCC

Commenting on this judgment in an ACCC Media Release, ACCC Chairman Rod Sims said:

“... Optus pressured customers by misrepresenting the time period in which services could be disconnected. Businesses should not make false representations which distort customers’ decision making.  This is particularly important when many Australians are moving to the NBN for the first time. It is illegal for businesses to mislead their customers and create a false impression through their communications. Today’s penalty serves as a warning to all businesses that such behaviour will be met with ACCC action.”

Restitution paid by Optus

Since the ACCC instituted proceedings against Optus in December 2017, the telco has paid $833,000 to customers affected by the forced disconnection. Also during 2017, the ACCC forced Optus to compensate more than 8,700 of its customers after charging them for download speeds they could not receive over the NBN.

Customers who were connected to its Boost Max plan that offered speeds of 100 megabits-per-second could only receive half that speed, while some users on Optus’ 50 megabit-per-second NBN plan were found to have clocked half that speed, or less.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.


Related Articles: